Federal appeals court weighs in on for-profit group's challenge to tightened Education Department rules, siding partially with industry on marketing-related regulation but upholding most of lower court decision.
Attorneys general in more than 20 states sent a letter Tuesday urging Congressional leaders to tighten federal rules in ways that could limit the ability of some for-profit colleges to enroll military service members and veterans using government aid. The letter, signed by 21 attorneys general and one state consumer protection official, calls on Congress to enact legislation that would count military and veterans' education aid along with Education Department student grants for the purposes of a federal rule that requires for-profit colleges to derive at least 10 percent of their revenues from sources other than federal aid. Right now military and veterans' educational aid is excluded from that total. Changes in the rule are unlikely given the current makeup of Congress.
The Consumer Financial Protection Bureau (CFPB) has expanded its investigation of for-profit institutions with a broad inquiry received last week by ITT Educational Services Inc., according to a corporate filing. Corinthian Colleges Inc. is responding to a similar probe. The new federal watchdog group has been tight-lipped about the investigation, but its director has spoken out in the past about colleges with institutional loan programs that have had high default rates. And both ITT and Corinthian have been criticized by consumer advocates for their lending practices.
The national accrediting agency for Career Education Corp. on Monday decided not to pursue penalties against 71 campuses that had been under review over reported problems with job placement rates. Four campuses, however, were placed on probation. The Accrediting Council for Independent Colleges and Schools had asked the for-profit higher education provider to demonstrate that its job-placement reporting was adequate after a recent review by an outside law firm found that some campuses lacked sufficient documentation. Career Education's president and CEO, Gary E. McCullough, resigned shortly after that news broke. Steven H. Lesnik, the new CEO, said in a news release that the company "had made great strides" but would continue to improve student job placement results.
In his recent op-ed, “For-Profits’ War on Philanthropy,” Johann Neem misses the point. Unfortunately, his deep philosophical opposition to for-profit colleges and universities gets in the way of an honest discussion.
While he’s absolutely right that public universities have long played a vital role in society, he fails to see that it’s ultimately the students, more than the universities or their legal structure, that matter. In today’s world with a very diverse population, very diverse workplace-skill demands, and a very diverse student body, we should celebrate the diversity of our postsecondary delivery system. I’d suggest that each element of higher education today -- public, private nonprofits and private for-profits -- plays a different, yet important, role.
As a professor himself, Neem rightly takes pride in the importance of not-for-profit colleges in society and their role in advancing the “public good.” What Dr. Neem should be focusing on, however, is the needs of American students.
Private sector colleges and universities offer unique opportunities for millions of men and women, particularly young professionals, military veterans and working parents. For our schools, the first-time, full-time student right out of high school is the rare exception rather than the norm. These institutions have enabled millions of Americans to obtain specialized degrees in a wide variety of fields. If that’s not advancing the public good, I don’t know what is.
For many of our students, who are seeking higher education while maintaining a household and full employment, a career-focused and specialized education from a private sector college or university is simply the most viable option.
Neem claims, without basis, that for-profit universities don’t have a vested interest in their students. One veteran, while re-registering for new classes in one of our schools, told me, “I could have attended a lot of other colleges and universities in this area. But this school, with its focused academic delivery of one course at a time, and the flexible scheduling, was the kind of education I need at this time in my life.”
What most confuses me about Neem’s article is his suggestion that for-profit colleges undermine the traditional role of philanthropy. Having served the past six years as the president and chief executive officer of the Council on Foundations, I happen to know something about the philanthropic sector.
First, let’s understand that philanthropy -- unlike charity -- is meant to be a long-term strategic investment in positive social change.
When I first arrived at the council, philanthropies were engaged in “competitive grant-making.” They would consider multiple grant requests and select the most innovative proposals.
But as impact became an important part of their work, most grant making institutions moved to strategic philanthropic investments, where a multiyear investment was made to create positive and real social change. Since the Great Recession, philanthropy has recognized the limit of public, private and philanthropic resources. In response, the sector has moved to public-private-philanthropic partnerships. The sector’s work with the Obama administration in areas such as “Race to the Top” and the Social Innovation Fund are prime examples of this change.
Today, private sector colleges and universities represent the classic example of a public-private-philanthropic partnership in higher education. Foundations do incredible work related to research and best practices in workforce investment strategies. The government funds programs like the Workforce Investment Act and Title IV to support students seeking to obtain workplace skills. Our schools -- and yes, their owners -- invest in the design and delivery of education programming. At a time when state and federal budgets are limiting support and access in traditional institutions of higher education, we should all celebrate the role private-sector colleges and universities provide to keeping our nation competitive and to equipping our students with the skills demanded in today’s workplace.
Today, public-private-philanthropic partnerships demand that we all work together to achieve change with limits on resources. We both combine and leverage resources. Lifelong learning and workforce investment is a classic example of this exemplified by the National Fund for Workforce Solutions. This same partnership is critical to our efforts to produce the skilled workers needed for the next decade. Look at the pioneering work of the Lumina, Gates, Mott and other foundations in this area -- especially most of our community foundations across the nation.
There’s no reason why both private and public education can’t play a vital role in America’s long-term recovery. The world is changing. So must education.
Steve Gunderson is president and chief executive officer of the Association of Private Sector Colleges and Universities.
The key action corporate leaders can take to improve higher education is to advocate for state-level policies that provide incentives for boosting productivity and that remove barriers to innovation, according to a report released Monday by the Committee for Economic Development. The nonprofit business group called for a focus on "broad-access" institutions, particularly less selective public colleges, two-year institutions and for-profits, because those colleges face the biggest challenges in educating the American workforce. But change does not come from within, the report argues, so businesses must work with state policymakers to nudge colleges to adapt innovations. As for specific policies, the group called for statewide degree attainment goals and performance funding based on student outcomes, rather than inputs.
Northern Virginia Community College is the latest two-year institution to announce a partnership with the University of Phoenix, with the announcement yesterday of a transfer agreement. Students from the community college will get a tuition discount when they transfer to Phoenix, according to a news release. They will also be able to tap the for-profit provider's prior learning assessment offerings, which can grant college credit for prior training and work experience. President Obama, who has often been critical of for-profits, has visited Northern Virginia five times for photo ops and to give speeches. Jill Biden, the vice president's wife, is a professor at the college.
The Student Veterans of America this month announced that it has suspended 40 chapters at for-profit institutions, saying that they were "using the SVA brand to legitimize their programs." At the time, the group did not name the chapters. Today it released a list of 26 chapters at for-profit institutions that continue to have their charters revoked. "In addition to being a peer support group, SVA chapters exist as campus and community based advocacy organizations. It appears that some for-profit schools do not understand our model, or worse, they understand our model and they choose to exploit it for personal gain," said a statement from Michael Dakduk, executive director of the association.